Russia wants closer energy links with Japan

TOKYO (majirox news) — Japan and Russia’s undeclared peace revolves mainly around energy. Without an energy issue, it’s doubtful that the two countries would be talking at all and their relations would be confined to exporting a few used cars from Japan to Vladivostok.

“Russia is one of the few countries in the world that has all elements of the nuclear cycle within its borders,” a Rosatom official said. “And over half of the nuclear power plants in the world do business with Rosatom in enriched uranium.”

Rosatom, a sprawling conglomerate engaged in activities as diverse as building nuclear power plants, running a fleet of nuclear-powered icebreakers and mining uranium, wants to set up an office in Japan. Rosatom would like to form links with Toshiba Corp. and through it to sell enriched uranium from Kazakhstan, as Toshiba already has close interests in the uranium-mining sector (in Kazakhstan).

More intriguing, Rosatom says, “We would like to recycle Japanese nuclear plant’s uranium in Siberia and assist in the Fukushima cleanup.”

Japan and Russia signed an accord on nuclear cooperation in 2009, but it has never been ratified by Japan. Prime Minister Noda says he will get it ratified during this session of the Diet, but given past Japanese problems cooperating with Russia on energy, notably on natural gas from the Sakhalin II facilities, an onshore processing facility, the chances are just as good that the accord might end up shuffled under a pile of more urgent papers.

Since the 1970s, Japan and Russia have been engaging in energy projects, with the result that Japan purchases oil, liquefied natural gas and coal from Russia. In 2010, it purchased 3.9 million tons of coal from Russia. However, this is only a fraction of the coal Japan imports. In 2010, the nation imported 160 million tons of coal and more than 60 percent was from Australia. This same pattern is duplicated in every field of energy product.

A shared history of disagreements and misunderstandings has acted to stop a wider expansion of the energy business. Many questions remain in the Japanese mind about the reliability of Russia as a supplier, and the advisability of becoming too dependent on them. Relations were particularly soured by the experience of the Japanese with the Sakhalin II consortium a few years ago. Some of the more cynical Japanese observers believe that as far as the Russians are concerned Japan functions mainly as a bargaining chip it can play off against China.

But as with all major projects, the lack of essential international bank guarantees and a legal structure between Japan and Russia continues to hamper the development of trade and normal relations. Japan and Russia are still, in theory, at war. They have never signed a peace treaty ending WW II, due to disputes over the Northern Territories, known as the Kuril Islands to the Russians.

As Japan talks more about the Trans-Pacific Partnership (TPP), also known as the Trans-Pacific Strategic Economic Partnership Agreement of the Asia-Pacific region, expands bilateral free trade areas with an increasing number of countries, and tries to promote the flow of Japanese trade worldwide, Russia stands out as a glaring exception. Links with Japan’s largest and nearest neighbor and its potential major trading partner continue to be very slim, and the chances of Russia’s Rosatom ever participating in a meaningful way in Japan’s nuclear industry also seem very slim.